What is excluded from the calculation of 'Gross Revenues' when determining Learningrx royalties?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
"Gross Revenues" means the total of all receipts derived from services or Products sold by you, whether the receipts are evidenced by cash, credit, checks, gift certificates, scrip, coupons, services, property, bartering, or other means of exchange. Gross Revenue excludes only sales tax receipts that you must by law collect from customers and that you actually pay to the government, promotional or discount coupons to the extent that Franchisee realizes no revenue, and employee receipt of services or Products, if free, or any portion not paid for by an employee. Cash income reports from the accounting software, without any deductions for any fees due to collection method, are used to calculate the royalty amounts due each month.
Source: Item 6 — OTHER FEES (FDD pages 13–19)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, the calculation of Gross Revenues excludes specific items when determining royalty payments. Gross Revenues are defined as the total receipts from services or products sold, encompassing cash, credit, checks, gift certificates, scrip, coupons, services, property, bartering, or other exchange methods.
However, Learningrx franchisees do not include sales tax receipts in their gross revenues, provided they are legally obligated to collect and remit these taxes to the government. Additionally, the value of promotional or discount coupons is excluded, but only to the extent that the franchisee does not realize any revenue from them. Finally, the cost of services or products provided free to employees, or any portion of such services or products not paid for by employees, is also excluded from the gross revenue calculation.
Learningrx uses cash income reports from the accounting software, without deductions for collection method fees, to calculate royalty amounts due each month. This definition is important for franchisees as it directly impacts the royalty fees they owe to Learningrx. Understanding these exclusions can help franchisees accurately calculate their gross revenues and, consequently, their royalty obligations.